Mining for Profit and Learning

I'm always on the lookout for new ways to make my mining rigs generate money. I know, that's sort of bass-ackwards -- we're supposed to be promoting cryptocurrencies, not mining cryptocurrencies so we can exchange them for fiat, right? RIGHT!? Well, maybe that's true for some of you, but for me I have bills (and debts) to pay, so I've definitely exchanged plenty of BTC/LTC/alt-coins for cold, hard USD, and I suspect the same holds true for many of you. Unless you have enough money that going out and buying thousands of dollars of mining hardware isn't a problem, then investing money into cryptocurrencies is at best a risky business. Which brings me to the point of this post.

Hypothetically, just to keep things simple let's say that you have 10,000 KHash of scrypt mining hardware at your disposal. Hopefully all of you are familiar by now with Coinwarz.com, Coinchoose,com, or some similar site -- and if you're not, you should be! I like Coinwarz as it let's you compare profitability to LTC, which is far more useful than looking at profitability vs. BTC mining since no one (smart) does that with GPUs anymore. Coinchoose does have a Litecoin comparison page, but for reasons I can't fathom it omits many/most of the scrypt coins and still includes several SHA256 coins. Seriously, what? Anyway, let's run some quick figures on Coinwarz with our 10,000 KHash:

Okay, that's a huge image and I apologize that I needed something like that. Obviously the exchange rates and mining difficulty are all in constant flux, so you can't base your choice of what to mine off of the above. But looking at this snapshot in time, we can see that there are some coins that look really profitable right now, but over the past fourteen days they're actually not that great -- PHS, ALF, FRK, and CAP are all in this category. On the other hand, we have coins that are currently not as profitable as their two-week average -- RPC, DOGE, and LOT fall into this group. So what do you mine?

So if you're mining alt-coins, at the current difficulty/exchange rate you could mine coins and then trade for BTC at the following rates (which are different from the above image), and I'll include LTC as the baseline since it's the one we have to beat in my book:

Coin Name (Symbol)	Rate in BTC per MHash	Monthly Earnings from 10 MHash/sec
Litecoin (LTC)	0.00918 BTC	~$2203 USD
RonPaulCoin (RPC)	0.01057 BTC	~$2537 USD
Lottocoin (LOT)	0.01225 BTC	~$2940 USD
Worldcoin (WDC)	0.01300 BTC	~$3120 USD
Dogecoin (DOGE)	0.0133 BTC	~$3192 USD
Fastcoin (FST)	0.01437 BTC	~$3449 USD
Neocoin (NEC)	0.01502 BTC	~$3605 USD

We've been over this before, but the basic idea is that you could build five systems capable of doing 10MHash+ total for roughly $10,000. If that's your investment, most of you would be pretty pleased to recover your money and begin making profit in three or four months, right? But what if I told you there are ways where you could double the best return on that list, on a fairly consistent basis? Yes, we're talking about 0.03 BTC per MHash of scrypt mining, so at $800 per BTC (an estimate given current prices), you would pay off a $10,000 investment in about 42 days! And what if the difficulty/exchange rate of the various alt-coins wasn't really a consideration?

I've caught your interest I hope, but I'm going to stop here for now -- I'll reveal why tomorrow. But let's just say that first, there are coins not yet listed on Coinwarz, and sometimes not even an any exchanges, and mining these early can reap huge benefits (albeit with some risk). That's one option, but for the other let me ask a question: Who made the most money on average during the Gold Rush of the 1800s? The answer to that leads into the answer of what to mine and how to do it...tomorrow. For now, here's my current pick of hardware for a $10,000 investment:

Component	Description	Price
Motherboard	Gigabyte GA-990FXA-UD3/UD5/UD7 AM3+	$145-$234 USD
Processor	AMD FX-8320 Vishera	$156 USD
Memory	Crucial Ballistix Sport 4GBx2 DDR3-1600	$73 USD
GPUs	3 x Radeon R9 280X 3GB	$1200 USD
Power Supply	2 x Rosewill Capstone 750W 80 Plus Gold	$200 USD
Storage	2.5" 60GB Kingston V3 SSD	$63 USD
Case?	Build it out of wood or PVC pipes!	$40 USD
Total Cost		$1877-$1966

The biggest change here is a move to an Extended ATX motherboard (the Gigabyte GA-990FXA-UD7), which comes with six x16 slots and will allow you to do one of two things: either run up to six GPUs with risers (note that you'll need more and/or beefier power supplies!), or short-term you could actually run it with three GPUs without risers and still get two slots between each pair of GPUs. $234 is a lot of money to spend on a motherboard, but with x16 risers now going for $20 each that's $60 for three GPUs that you save, and you still have room to expand in the future. The UD3 and UD5 are less expensive alternatives, with the UD3 being standard ATX and it comes with four x16 slots, while the UD5 is also an ATX board but it comes with five x16 slots.

The other change is the recommendation to build your own case using either wood or PVC pipes, both of which are relatively inexpensive and easy to procure. My next case I've decided to go with wood -- I'll take pictures when it's done. It may not look as classy as an aluminum frame cage, but almost everyone has easy access to wood, a circular saw, a hammer, and nails -- and since wood doesn't conduct there's less risk of shorting out your motherboard if you're not careful with the mounting. Just make sure you have adequate airflow so nothing catches fire. :-)

Analysis of the Recent Performance of Hashco.ws (and Multi-Coin Pools in General)

Coin selection of late for most of the multi-coin pools seems a bit whacky. I don't know what the algorithm for Hashco.ws is, but I can look at Coinwarz and coinchoose and get a good idea of what sort of profitability each coin is supposed to have. I'm starting to wonder if Hashco.ws and others aren't being intentionally mislead by some external site on what to mine -- do they do their own internal calculations, or do they use externally available calculations? The reason this is important is because if it's not internal and correct, the results can be less than desirable. Let me give some examples from today's Hashco.ws statistics.

I just saw Mincoin showing a potential 600%+ profit relative to LTC on Coinwarz (around 10PM PST), which is pretty amazing. Not surprisingly, Hashcows was mining MNC at that time. But just a few minutes later, MNC was at 77% profits vs. LTC, so in the course of 10 minutes or less, MNC spiked to a huge value and then plummeted to a lousy value. The result of this is that Hashcows spent 10 minutes on MNC, mining 36 MNC that at current exchange rates are worth 0.02382912 BTC. If they were to mine at that rate 24/7, all 1700MHash of power at Hashcows would generate 3.43139328 BTC in a day, or around 0.002 BTC per MHash, which is obviously far less than what you would get from just mining LTC (currently around 0.007 BTC/MHash).

Now if this was the exception rather than the rule, that would be fine, but for the past few days that doesn't appear to be the case. Hashco.ws mined WDC for 126 minutes earlier today, generating 1283.0131392 WDC during that time. If we mined 24/7 on WDC, that would work out to 14663 WDC per day. At the current exchange rate (0.00043139) they could trade for at best 6.325 BTC. That means around 0.0037 BTC per MHash. But Coinwarz is showing 125% profitability vs. LTC right now. Maybe we just had an unlucky spell?

Let's try another.... Round 6565 at Hashco.ws was Ron Paul Coin (RPC), for 3 hours  55 minutes (3.917 hours), during which time the pool mined 59.0672 RPC. At the current exchange rate of 0.0191 BTC per RPC (and the best we've seen in the past 24 hours is only 0.02655 BTC per RPC), we're looking at 361.9437 RPC per day, which would be worth 6.91 BTC (or best-case 9.61 BTC), so again we're well below the 100% mark of LTC mining. Remember, LTC mining on its own with 1700MHash out to generate 436 LTC per day, which at 0.029 BTC each is 12.35 BTC per day.

But all of the alt-coins are going soft, right? Well, not quite....

What about DOGE? I know it was created as a joke coin, but I haven't seen a round of DOGE lately on Hashco.ws, which is odd. With 0.00000045 BTC per DOGE, based on the Coinwarz calculator Hashco.ws should be able to get around 18.171 BTC per day with 1700MHash, so there's at least one alt-coin that's beating the odds. Hell, even at the worst trade value of 0.00000025 BTC per DOGE (from Jan 8-9 time), we'd be looking at 10.095 BTC per day, which is still better than any of the other alt-coins I've run the calculations on above.

This is a long-winded way of saying something has perhaps gone fubar with the Hashco.ws (and Middlecoin and probably others as well) algorithm for selection of coins. Maybe it's that difficulty plummets, making the coin(s) look attractive, but by the time 1700MHash enters the picture the difficulty jumps back up and profitability drops back to nothing. Whatever is happening, all I can say is that right now profitability for mining via the multi-coin pools is not working out to what it should be. And what it should be is more profitable than mining LTC directly -- that's the whole point.

If you're still trying to mine at Hashco.ws or Middlecoin, I know personally the returns have been very poor for the past week -- like less than half of what you should get relative to mining LTC. Just going static on mining one of the more stable alt-coins like DOGE, WDC, LOT, EAC, etc. is supposed to be beating LTC by at least 20% over the past 14 days, and every time the multi-coin pools switch it seems to result in lower profits for miners. For now, I'm going to try manually mining one or two of the "best" alt-coins for a day and see what sort of returns I can get via Cryptsy's automatic trading. I'll report back and see how I do compared to Hashco.ws (where I've left ~1MHash of mining power).